Rate Shopper guide for Hotel Pricing Strategy

A Guide to choose Rate Shopper Tool
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Who can benefit from this best practice guide?
Revenue Managers/Directors, Hotel General Managers & Hotel Owners can benefit from this
guide along with all the other hospitality industry professionals, who are responsible for
sourcing a range of rooms at competitive and comparable rates and have to monitor rates
from multiple sources like GDSs, Meta search sites, OTAs etc.
Perishability and limited inventory are the two most important aspects of hotel business.
So pricing of a room automatically becomes one of the most important KPIs for a Revenue
Manager. There are multiple aspects that influence pricing viz- compset, market supply,
reviews and ratings etc. As a result, hotels cannot be living in silos. Rather, they have to
constantly monitor their competitors’ prices and offers.
It is no secret that hotels today offer multiple rates combined with multiple room options.
Besides, in order to track the competition, they multiply this number to the total number of
competitor hotels which need to be tracked.
The aforementioned activity cannot be achieved manually. Here arises the need for an
automated price shopping tool. After all, collecting and analyzing this data is a time-
consuming, costly and ineffectual process for those who take it on without proper
automation tools.
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Rate Shopping is a Crucial Part of a Successful
Revenue Management Strategy

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Price Pellucidity: Prospective guests today consider their target hotel’s online
reputation as well as price on all the OTAs, before determining the value of their
choice. Hence, price no longer equates to quality.
Demand is a Function of Price: Hotels need to understand that pricing
strategies are highly influenced by demand, which has become a function of
price. But they should not forget that demand is also a function of reputation.
Reputation Pricing: Hotels today are highly impacted by social media platforms.
These platforms can be used to influence the consumer and their purchasing
decisions.
Your real competition is just based on the distance or star category or there is
another set of online competition
Competing on price alone, is it a winning strategy? Let us find out.
Challenges in Hotel Rate Shopping:
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Below are Key Features and Capabilities that Revenue Managers
need to evaluate while shortlisting a
Rate Shopping Solution
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1. Freshness of hotel rates
How do you ensure that your pricing is relevant? To ensure correct pricing changes, it is
extremely critical that rates shopped are recent and also highly relevant.
2. Rate Details
Hotels tend to have multiple rates with various amenities so that they can carry
out apple-to-apple comparison of their rates and all other add on features. A rate
shopper needs to give rate details for all the rates shopped.
3. Integration with RMS
As a Revenue Manager, you do refer to the revenue management system or the RMS,
which uses competition rates to benchmark and make rate suggestions. Without a
seamless integration between RMS and Rate Shopper tools, hotels won’t have this
information.
4. Ability to shop on Metasearch
Meta search sites are trying to grab the top space in the industry today. Competitor price
listings from these sites need to be crucial to your hotel’s pricing strategy, so a rate
shopper which can’t shop from these will be counter productive.
5. Ability to pull rates from GDS
GDS is the second cheapest option for a hotel to get room nights, after the brand
website. Most hotels sell non-negotiated rates on GDSs too; so without a rate shop from
GDS, making a pricing plan for an on-negotiated GDS rate will be difficult. Besides, it is
crucial to ensure that GDS data is fresh as well.

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6. Capability to shop from Mobile Apps and Mobile Websites
New age channels also include Mobile options and with an increase in bookings made on
the go, hotels are making offers exclusive to mobile users. Hence, a pricing strategy for
mobile needs to have competitor rates from mobile.
7. Vacation Rentals – The New age channel shop
Channels like Airbnb or Rooms Tonight have created a new market, to satisfy a niche group
of customers. The impact of these websites is huge. Therefore, hotels need to track short-
term lodging including vacation rentals, apartment rentals, homestays, hostel beds, or hotel
rooms on such sites. So a good question to ask the vendor your evaluating is “Does your
tool shops from Airbnb or Rooms Tonight?”
8. Shop brand sites
Many tools do not shop from brand sites from competitors, this is a disadvantage because
we have observed that hotels have nearly 5:1 ratio in terms of rates that they offer on their
brand site vs. leading OTA sites. If your rate shopper is not shopping on competitor brand
sites, then you are losing out.

9. Shop different rate types and identify them
Hotel rates have 2 types of conditions:
1. Cancellation specific scenario where hotels restrict buyers from cancelling to avail a
special rate.
2. Booking condition, where a specific discount is offered to meet a specific condition
which is met.
It would not be possible for a hotel to make a relevant comparison if their shopper is not
able to shop these rates and is not highlighting them in a report either.
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10. Make a correct rate comparison by rate mapping
While we discuss different rate types in a hotel, there are variations in rates based on their
inclusions, policies as well as different room types have these rates. Thus, while a rate
shopper can shop for various rate/room combinations, mapping them with keywords is
crucial to ensure an apple-to-apple comparison.
11. On the go access
Just like the increase in on-the-go bookings, being a hotel Revenue Manager, you too need
mobile-optimize your rate shopper to tap on crucial alerts and reports. Only then you can
make quick judgements and calls pertaining to pricing, and eventually stay ahead of the
curve.
12. On Demand rate shop
While hotels have their scheduled reports ready, which give information about rates
from the entire distribution landscape, there will be situations where a change in hotel
dynamics owing to a sudden pickup/wash in a city event will arise. Hotel rate shopper must
consider it to gauge its impact and accordingly pave way for on-Demand shops, for greater
emphasis.
13. Shopping for multiple LOS
A hotel guest has multiple days in their stay. Keeping that in mind, hotels should offer rates
based of their LOS. Similarly, their competitors need to make relevant rates and offerings,
so that they can ensure that relevant propositions are made and one also gets to know what
their competitor is offering and what the rate shopper shows in the rate shopping report.
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14. Capacity to distinguish tax inclusive rates from tax exclusive rates
OTAs operate in different models. While some present rates inclusive of tax to customers,
there are others that keep the ‘tax’ component completely out of price. Thus to get the
correct idea about market offerings, a hotel rate shopper should be able to separate the
tax component from inclusive price and then present it in a report along with tax exclusive
price.

15. Product mapping on any key word
Hotel Revenue Manager should correctly map components for an apple-to-apple comparison
in terms of Room/Rate combination. Another aspect that a Hotel Revenue Manager should
do is map key words such as Wi-Fi or Airport Transfer, so as to map similar rates which they
need to offer.
16. Regional channels
Some regional OTAs have a massive impact on a particular region’s OTA contribution. This
includes Ctrip in China or Rakuten in Japan. Having a rate shopper that does not shop from
such OTAs and these regions, which happen to be source markets for the hotel, means the
hotel is currently staying in the dark and the hotel will be unable to draw a comprehensive
pricing strategy.
17. Rate Movement
While hotels tend to look at their occupancy PACE using RMS/manual methods, they do
this exercise for their BAR. By doing it, they miss out on a critical trend which is how their
and the competitor’s pricing strategy is moving. By doing this analysis, they gauge their
competitor’s pricing strategy. A rate shopper should be able to do that for the hotel.
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18. Know age of data
Freshness of data is extremely critical for a hotel’s pricing decision. When a hotel Revenue
Manager makes his pricing decisions and refers to a report, it should properly mention
when the rate was shopped. It should also outline the age of this data so that no errors are
made owing to ambiguity of data age.
19. Enterprise capability
While a rate shopper is an extremely important tool for a hotel, it is equally relevant for a
regional Revenue Manager or a cluster Revenue Manager. The tool gives them the ability to
shop and get data from multiple hotels in a click.
20. Rate Parity
Is your Parity in check? Your tool should be smart enough to do rates and availability check
for you.
21. Ability to shop multiple domains of the same site, based on source market
Another key ability of a potent rate shopper is that it should provide rates from multiple
domains of the same brand site. This will give you correct and relevant comparison from
the source market.

22. Keep an Eye on Local Demand
Are you prepared to tap the upcoming business opportunities? To capitalize on the future
events and holidays, specify impact on your business your tool must be intelligent enough
to notify and report all the events & holidays where the rate adjustments are most likely to
improve your RevPAR.
23. Identify Online Hotel Competitors
OTA listings have become imperative revenue channel for Hotels, consequently your OTA
rank is a key metrics that influence your booking from a given OTA. A Hotel competitor
tool that can track your OTA rank along with hotels that are above and below you is great
information to identify new Compset hotels who otherwise would remain unknown.
24. Global Support
You need a rate pricing tool which renders 24/7 global support.
Rate Shopping Tool has to be a comprehensive Rate Intelligence solution. It should cater to
multiple purposes. In order to correctly select a Rate Shopping Solution, you have to adopt
an effective and intelligent rate strategy.
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In order to leverage high-quality business intelligence data, you have
to redefine your rate strategy .It’s no more about the RateShopping but
many components of Rate shopper that make a complete, competitive
intelligence tool.
Such a system captures hundreds of thousands of hotels worth of data
to engender rate and availability alerts in a few clicks. It delivers granular
analysis to eventually help you monitor massive fluctuations in your
market on time, as well as act immediately.
Online Competiveness 101 for Hotels
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Conclusion

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Bangkok, Thailand
Barcelona, Spain
Jakarta,
Indonesia
London, UK
Virginia, USA
Durban, South
Africa
Kuala Lumpur,
Malaysia
Delhi NCR,
India
Brazil
Columbia
Cape
Town
JapanChicago,
USA
More about RateGain
Founded in 2004, RateGain is a leading provider of cloud-based products and services
around the function of hotel Rate Intelligence, Price Optimization, Seamless Electronic
Distribution and Brand Engagement to the world’s leading Hotels and Online Travel Agents.
With continued innovation and excellence in customer focus, we are proud to serve over
12,000 clients and numerous industry partners.
Our customers are global and so are we, with offices in 10 countries across all major
continents, supported by over 500 passionate professionals and seasoned industry experts.
Through world-class solutions, RateGain helps its industry leading customers beat their
competition and make more revenue every day.
If you are looking for a latest solution for your channel management &
online room distribution needs, we invite you to:
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& Distribution
Competitor Rate
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Manager
Revenue
Optimizer
Distribution
Channel
Manager
Guest
Feedback
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Integrated
Analytics
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www.rategain.com | marketing@rategain.com | US: 866.318.4358 | UK:
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Rate Shopper guide for Hotel Pricing Strategy

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